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Annual 1099-DIV

2017 Common Stock Tax Information

InfraREIT provides the following tax information to its common stockholders pertaining to the character of distributions paid during 2017, including how the allocations will appear on Federal Form 1099-DIV:

Common Stock

CUSIP 45685L100

Ticker Symbol: HIFR

Record Date

Payable Date

Total Distributions Per Share

Total Ordinary Dividends Box 1a

Qualified Dividends Box 1b

Capital Gains Distributions Box

Nondividend Distributions Box

3/31/2017

4/20/2017

$ 0.2500

$ 0.2500

$ 0.0000

$ 0.0000

$ 0.0000

6/30/2017

7/20/2017

$ 0.2500

$ 0.2500

$ 0.0000

$ 0.0000

$ 0.0000

9/29/2017

10/19/2017

$ 0.2500

$ 0.2500

$ 0.0000

$ 0.0000

$ 0.0000

12/29/2017

1/18/2018

$ 0.2500

$ 0.2500

$ 0.0000

$ 0.0000

$ 0.0000

Total 2017 Distributions

$ 1.000

$ 1.000

$ 0.0000

$ 0.0000

$ 0.0000

Box 3: Nondividend distributions are nontaxable and considered return of capital to the extent of your basis in our stock and then capital gain to the extent of the distribution exceeds such amount.

Nothing contained herein should be construed as tax advice, shareholders are encouraged to consult with their tax advisors as to their specific tax treatment of InfraREIT’s distributions. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

2016 Common Stock Tax Information

InfraREIT provides the following tax information to its common stockholders pertaining to the character of distributions paid during 2016, including how the allocations will appear on Federal Form 1099-DIV:

Common Stock

CUSIP 45685L100

Ticker Symbol: HIFR

Record Date

Payable Date

Total Distributions Per Share

Total Ordinary Dividends Box 1a

Qualified Dividends Box 1b

Capital Gains Distributions Box 2a

Nondividend Distributions Box 3

3/31/2016

4/21/2016

$ 0.2500

$ 0.2500

$ 0.0000

$ 0.0000

$ 0.0000

6/30/2016

7/21/2016

$ 0.2500

$ 0.2500

$ 0.0000

$ 0.0000

$ 0.0000

9/30/2016

10/20/2016

$ 0.2500

$ 0.2500

$ 0.0000

$ 0.0000

$ 0.0000

12/30/2016

1/19/2017

$ 0.2500

$ 0.2500

$ 0.0000

$ 0.0000

$ 0.0000

Total 2016 Distributions

$ 1.000

$ 1.000

$ 0.0000

$ 0.0000

$ 0.0000

Box 3: Nondividend distributions are nontaxable and considered return of capital to the extent of your basis in our stock and then capital gain to the extent of the distribution exceeds such amount.

Nothing contained herein should be construed as tax advice, shareholders are encouraged to consult with their tax advisors as to their specific tax treatment of InfraREIT’s distributions. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

2015 Common Stock Tax Information

InfraREIT provides the following tax information to its common stockholders pertaining to the character of distributions paid during 2015, including how the allocations will appear on Federal Form 1099-DIV:

Common Stock

CUSIP 45685L100

Ticker Symbol: HIFR

Record Date

Payable Date

Total Distributions Per Share

Total Ordinary Dividends Box 1a

Qualified Dividends Box 1b

Capital Gains Distributions Box 2a

Nondividend Distributions Box 3

3/31/2015

4/23/2015

$ 0.1400

$ 0.1400

$ 0.0000

$ 0.0000

$ 0.0000

6/30/2015

7/23/2015

$ 0.2250

$ 0.2250

$ 0.0000

$ 0.0000

$ 0.0000

9/30/2015

10/22/2015

$ 0.2250

$ 0.2250

$ 0.0000

$ 0.0000

$ 0.0000

12/31/2015

1/21/2016

$ 0.2250

$ 0.2250

$ 0.0000

$ 0.0000

$ 0.0000

Total 2015 Distributions

$ 0.8150

$ 0.8150

$ 0.0000

$ 0.0000

$ 0.0000

Box 3: Nondividend distributions are nontaxable and considered return of capital to the extent of your basis in our stock and then capital gain to the extent of the distribution exceeds such amount.

Nothing contained herein should be construed as tax advice, shareholders are encouraged to consult with their tax advisors as to their specific tax treatment of InfraREIT’s distributions. Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code.

Tax Features

Company Tax Features

InfraREIT elected effective for its 2015 tax year to be treated as a REIT for federal income tax purposes. Our REIT election, assuming continued compliance with the applicable tests, will continue in effect for 2015 and subsequent taxable years.

REITs are generally not subject to federal corporate income taxes on taxable income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.

A REIT is generally required to distribute, during the taxable year, an amount equal to at least 90 percent of its REIT taxable income (determined under Internal Revenue Code section 857(b)(2), without regard to the deduction for dividends paid). If the minimum distribution requirement is satisfied, the REIT is generally entitled to a deduction for dividends paid. Stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify for the reduced tax rates applicable to qualified dividend income, or for the dividends received deduction.
In order to qualify as a REIT for federal income tax purposes, InfraREIT must continue to meet certain asset tests, income tests, distribution requirements and organizational requirements. These are discussed in detail in the "Material Federal Income Tax Consequences" section of our Prospectus dated January 29, 2015.

Stockholder Tax Features

Stockholders of InfraREIT recognize income only if InfraREIT pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Any such distributions out of earnings and profits will be taxable to a stockholder in the current period as dividend income. Distributions that exceed InfraREIT's current or accumulated earnings and profits constitute a return of capital to the extent of the stockholder's tax basis in its stock and then as capital gain.

Dividend income will be treated as "ordinary dividend income" for federal income tax purposes. Ordinary dividend income is treated as ordinary income, subject to a maximum income tax rate of 39.6%. Additionally, a 3.8 percent tax will generally be imposed on the net investment income of certain individuals with an adjusted gross income in excess of $200,000 ($250,000 in the case of joint filers) and on the undistributed net investment income of certain estates and trusts. For these purposes, "net investment income" will generally include interest, dividends (including dividends paid with respect to our stock), annuities, royalties, rent, net gain attributable to the disposition of property not held in a trade or business (including net gain from the sale, exchange or other taxable disposition of shares of our stock) and certain other income, but will be reduced by any deductions properly allocable to such income or net gain.

There is no assurance that InfraREIT will make regular distributions or that InfraREIT's expectation regarding the tax character of its distributions will be realized.

Upon the sale of InfraREIT stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's tax basis in the stock sold, as adjusted to reflect prior distributions treated as return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock was held as a capital asset for more than one year.

If you should have any questions or need further information please contact Investor Relations.

Report of Organizational Actions Affecting Basis of Securities

Issuers of corporate securities must complete Federal Form 8937 to report organizational actions, including nontaxable distributions that affect the basis of the securities involved in the organizational action. The information contained herein does not constitute tax advice and does not purport to be complete or describe the consequences that may apply to particular categories of shareholders. The information contained in Federal Form 8937 is intended to satisfy the requirements of public reporting under sections 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations and as a convenience to shareholders and their tax advisors when establishing their specific tax positions.

If you should have any questions or need further information please contact Investor Relations.

If you should have any questions or need further information please send an email to Tax@InfraREITInc.com.

The information provided on these pages includes forward-looking
statements, which are subject to known and unknown risks and
uncertainties that could cause actual results to differ materially. We
refer you to the discussion of risk factors that could
affect future results and performance in our most recent prospectus and
other SEC filings. InfraREIT, Inc. assumes no obligation to update any
forward-looking statements made here as a result of new information or
future events or developments.

InfraREIT, Inc. makes no claims concerning the accuracy of the
information provided on these pages, and will not be held liable for any
use of this information. Note: Historical and current stock price
performance data is not necessarily indicative of
future performance.